CETA will constrain options for governments at all levels

Stuart Trew has worked as a trade researcher and campaigner with the Council of Canadians for the past six years. He is the author of the council’s new report, The CETA Deception, and co-authored a chapter on the Canada-EU trade negotiations in the recently published Europe, Canada and the Comprehensive Economic and Trade Agreement (Routledge, March 2011).

Canadian trade negotiators are in Brussels this month for another round of free trade and investment talks with the EU. Though the negotiations are delayed — they’ve been at it for three years now — the expectation is still that the Conservative government will be able to clinch a deal eventually, if not by the end of 2012 as planned. That is, unless public opinion gets in the way, which it is threatening to do in both Europe and Canada.

Believe it or not, where the Conservatives may once have seen their Comprehensive Economic and Trade Agreement (CETA) as another economic “no brainer,” concluding the deal might actually use up a lot of Prime Minster Harper’s political capital. Disagreements within the closed-door CETA negotiations are spilling out onto the street as leaked text becomes available, creating fissures that will only widen over time.

One of them is brand new. On July 4, the European Parliament voted to reject the Anti-Counterfeiting Trade Agreement, a mostly developed-world treaty that was, on paper, supposed to help crack down on trade in counterfeit products. European Internet activists protested that ACTA’s copyright provisions would dangerously constrain Internet freedom and privacy, and even hurt online innovation. They also complained loudly that ACTA was negotiated in secret.

These groups celebrated the July 4 vote for about three days. Then University of Ottawa law professor Michael Geist leaked a February 2012 version of the CETA intellectual property chapter, which looked identical to ACTA in a number of places. Within hours, the formidable European Internet freedom community had rebooted its campaign, this time against what had been a relatively low-key trade negotiation with Canada.

The road to CETA is getting bumpy at home as well. A recent Postmedia news article quoting internal government documents confirms that a new public relations blitz on CETA was a direct response to growing concerns, particularly among the over 40 and counting municipal governments seeking exemptions from the deal. These cities and towns are worried that CETA will undermine their local development options by banning “Buy Canadian” or “buy local” policies. They are unlikely to take well to an agreement that doesn’t completely exclude municipalities from these prohibitions on government procurement.

The provinces are also increasingly uneasy about drug patent extension and other intellectual property rights changes sought by the EU that are bound to increase the cost of public drug plans. This is not a “what if” scenario. By delaying the introduction of cheaper generic drugs, CETA will prolong the amount of time the provinces will be paying brand name prices that are already higher in Canada than many other OECD countries. The provinces are reported to have asked the federal government for compensation in the event costs go up even higher under CETA.

The municipal and provincial concerns offered the Harper government a chance to engage Canadians maturely on CETA. Instead, in April 2012, the Prime Minister dispatched 18 of his ministers to press conferences across the country, enlisted marketing support from several big business lobby groups, and created a new webpage to try to sell, not discuss, the agreement. Where there was once a cavernous lack of information about CETA, there is now an abundance of misinformation.

The Council of Canadians released a report last week in response to the new propaganda campaign. In it, we accuse the Harper government of purposely confusing what critics have been saying about CETA, and of resorting to complete falsehoods on some of the deal’s more controversial parts.

For example, a new government fact sheet says that nothing in CETA will undermine the right to regulate for public health or environmental reasons, and that trade and investment agreements do not allow foreign firms to challenges these measures. Both statements are demonstrably false.

CETA and free trade deals like it specifically limit opportunities for governments to introduce new rules and regulations that have an impact on trade and investment flows, even if the intention of the rules was to protect the environment or public health. The United States has recently lost three World Trade Organization disputes involving meat labelling, a ban on flavoured cigarettes to discourage smoking among children, and voluntary measures designed to protect dolphins from tuna fishing.

Based on leaked text, CETA will include language with the intent of avoiding new regulation as the best and least trade-distorting option. It will also provide Canada and the EU with tools to frustrate or delay the introduction of new standards by the other party, which should worry European legislators drafting fuel quality standards that discourage the importation of fuel derived from tar sands.

CETA will also most certainly give European firms the power to challenge and even overturn government measures, just as NAFTA gave this right to U.S. and Mexican firms.

Canada very recently lost a NAFTA investment case to Exxon Mobil and Murphy Oil. A three-person arbitration panel decided the province of Newfoundland and Labrador should either get rid of its profit-sharing requirements on offshore oil and gas projects or else compensate the firms for as much as $65 million for the inconvenience. Apparently the measures are an illegal “performance requirement” on the oil firms, one of which was the richest company in the world in 2011.

What chance does any Canadian province have to develop their resources sustainably and to the greatest public benefit when agreements like NAFTA and CETA take away all their policy options?

The most egregious Conservative claim is that CETA has been one of the most “transparent trade negotiations in Canadian history.” Meanwhile the text for the agreement is off limits to the public, and Canadians will have no say in what the deal looks like before it is signed. We know from past experience that Parliament also has little to no authority to make any changes to the text. Efforts at committee by the opposition to amend the Colombia, Peru and Jordan free trade agreements were shot down.

This is the antithesis of transparency. If CETA and agreements like it are supposed to be 21st century or “next-generation” free trade deals, they should be negotiated in 21st century ways — openly, transparently, and with broad public input. Failure to do so in the ACTA negotiations led to that agreement’s demise in the European Parliament. The same fate could easily await CETA on both sides of the Atlantic.

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